The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company. Nelson Company uses a perpetual inventory system. It categorizes the following accounts as selling expenses: Depreciation Expense-Store Equipment, Sales Salaries Expense, Rent Expense-Selling Space, Store Supplies Expense, and Advertising Expense. It categorizes the remaining expenses as general and administrative. Cash NELSON COMPANY Unadjusted Trial Balance January 31 Debit Credit $ 22,400 13,500 Merchandise inventory Store supplies 6,000 Prepaid insurance Store equipment 2,400 42,800 Accumulated depreciation-Store equipment $ 16,750 Accounts payable 14,000 Common stock 5,000 Retained earnings 29,000 Dividends 2,200 Sales 115,450 Sales discounts 1,950 Sales returns and allowances 2,150 Cost of goods sold 38,000 Depreciation expense-Store equipment 0 Sales salaries expense 12,900 Office salaries expense 12,900 Insurance expense 0 Rent expense-Selling space 6,500 Rent expense-Office space 6,500 Store supplies expense Advertising expense Totals Additional Information: 0 10,000 $ 180,200 $ 180,200 a. Store supplies still available at fiscal year-end amount to $2,950. b. Expired insurance, an administrative expense, is $1,800 for the fiscal year. c. Depreciation expense on store equipment, a selling expense, is $1,625 for the fiscal year. d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,100 of inventory is still available at fiscal year-end. 4. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31. Note: Round your answers to 2 decimal places. Current ratio :1 Acid-test ratio :1 Gross margin ratio :1
The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company. Nelson Company uses a perpetual inventory system. It categorizes the following accounts as selling expenses: Depreciation Expense-Store Equipment, Sales Salaries Expense, Rent Expense-Selling Space, Store Supplies Expense, and Advertising Expense. It categorizes the remaining expenses as general and administrative. Cash NELSON COMPANY Unadjusted Trial Balance January 31 Debit Credit $ 22,400 13,500 Merchandise inventory Store supplies 6,000 Prepaid insurance Store equipment 2,400 42,800 Accumulated depreciation-Store equipment $ 16,750 Accounts payable 14,000 Common stock 5,000 Retained earnings 29,000 Dividends 2,200 Sales 115,450 Sales discounts 1,950 Sales returns and allowances 2,150 Cost of goods sold 38,000 Depreciation expense-Store equipment 0 Sales salaries expense 12,900 Office salaries expense 12,900 Insurance expense 0 Rent expense-Selling space 6,500 Rent expense-Office space 6,500 Store supplies expense Advertising expense Totals Additional Information: 0 10,000 $ 180,200 $ 180,200 a. Store supplies still available at fiscal year-end amount to $2,950. b. Expired insurance, an administrative expense, is $1,800 for the fiscal year. c. Depreciation expense on store equipment, a selling expense, is $1,625 for the fiscal year. d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,100 of inventory is still available at fiscal year-end. 4. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31. Note: Round your answers to 2 decimal places. Current ratio :1 Acid-test ratio :1 Gross margin ratio :1
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company. Nelson Company uses a
perpetual inventory system. It categorizes the following accounts as selling expenses: Depreciation Expense-Store
Equipment, Sales Salaries Expense, Rent Expense-Selling Space, Store Supplies Expense, and Advertising Expense. It
categorizes the remaining expenses as general and administrative.
Cash
NELSON COMPANY
Unadjusted Trial Balance
January 31
Debit
Credit
$ 22,400
13,500
Merchandise inventory
Store supplies
6,000
Prepaid insurance
Store equipment
2,400
42,800
Accumulated depreciation-Store equipment
$ 16,750
Accounts payable
14,000
Common stock
5,000
Retained earnings
29,000
Dividends
2,200
Sales
115,450
Sales discounts
1,950
Sales returns and allowances
2,150
Cost of goods sold
38,000
Depreciation expense-Store equipment
0
Sales salaries expense
12,900
Office salaries expense
12,900
Insurance expense
0
Rent expense-Selling space
6,500
Rent expense-Office space
6,500
Store supplies expense
Advertising expense
Totals
Additional Information:
0
10,000
$ 180,200
$ 180,200
a. Store supplies still available at fiscal year-end amount to $2,950.
b. Expired insurance, an administrative expense, is $1,800 for the fiscal year.
c. Depreciation expense on store equipment, a selling expense, is $1,625 for the fiscal year.
d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,100 of inventory is still
available at fiscal year-end.
4. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31.
Note: Round your answers to 2 decimal places.
Current ratio
:1
Acid-test ratio
:1
Gross margin ratio
:1
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